Top Image Systems Ltd. (NASDAQ:TISA) shares are escalating a solid 22% after the company announced this morning that its management restructuring has attained the crowning level of the organization. The firm’s Founder and Active Chairman of the Board Izhak Nakar is stepping down with top TISA shareholder Don Dixon, who has served as a managing director at Trident Capital, set to take his stead.
Though Nakar is leaving his role, he will move forward holding onto his Board membership as well as a considerable stake in TISA. This new development marks the next in a series of transition moves that have sprung up after Brandan Reidy’s appointment as CEO back in August 2016 coupled with his prior steps up to positions as CTO, CMO, CSO, and CFO. Previously, Reidy served as CEO for three prior Trident investments with a most recent execution of the “turnaround” and sale of XRS Corp (NASDAQ:XRSC).
Top analyst David Hynes at Canaccord is excited about “new talent at the top” and therefore reiterates a Buy rating on TISA with a price target of $3.50, which represents a just under 150% increase from where the shares last closed.
For the analyst, this news is just another shining piece of the puzzle bolstering his bullish perspective on the stock. Hynes sings the praises of Dixon, commending his seasoned background that renders the new Chairman an excellent choice for new leadership. The analyst underscores, “Incoming Chairman, Mr. Dixon, has extensive experience in transforming and growing shareholder value for his portfolio companies and has had successful exits from 36 companies over his career.”
Ultimately, “We view this morning’s news as a positive development to the story, and our view on TISA shares is unchanged: the firm has done a nice job of getting the business back on the right side of breakeven (an execution milestone that is critical to success), and we think the strategy to focus on a higher-velocity, partner-enabled, and increasingly cloud go-to-market for payables automation is logical. With TISA shares trading at less than 1.0x EV/revenues on C2016 estimates and the firm set to grow and be profitable in C2017, we’re willing to stick it out and keep our BUY rating,” Hynes contends.
Moving forward, the analyst projects revenues to hit $34.2 million and operating income to reach $1.1 million, indicating respective 5% growth and 3.1% margins, notably far ahead of last year’s -3% growth and 0.9% margins.
David Hynes has a very good TipRanks score with a five-star ranking, 71% success rate, and a high standing of #54 out of 4,345 analysts. Hynes garners 27.5% in his yearly returns. However, when recommending TISA, Hynes loses 36.3% in average profits on the stock.
Additionally, Richard Baldry of Roth Capital rates a Buy with a $3.50 price target.